The purpose of the the appraisal usually sets the stage for who gets the appraisal report first.
There are many reasons that an appraisal is required and as a general rule of thumb the Client usually gets the appraisal report first.
You also may be wondering: “How do I find the last appraisal of a house?”
I’ll go over a few different scenarios below so you’ll know who gets the appraisal report first and also who will see your home appraisal.
FIRST UP: The appraisal report is not public information.
Confidentiality plays an important role in the home appraisal reporting process.
As appraisers we have a fiduciary duty to our Client.
This means the report is confidential and is it not recorded anywhere in any public record.
The property appraisal report is kept in my private file and only shared with my Client.
Therefore, if you have hired me to appraise your property then you are my Client.
Which means I will only discuss the appraisal contents and results with you unless you have given me written permission to discuss the report with another person.
The only exception is when we are required by law or a subpoena.
The appraisal belongs to you so you can share the report with someone else if that is your decision.
So, if you wondering how to find the last appraisal of a house then you will need to know who the Client is and ask them to see the report.
If you were the Client then, you could ask the appraiser for a copy.
IMPORTANT FACT: Paying for the appraisal report does not mean that you are the Client. Keep reading for more details.….
Who Gets the Appraisal Report First?
There are many reasons to have a property appraised.
The purpose of the the appraisal usually sets the stage for who gets the appraisal report first.
Here are the most common purposes that we see in our property appraisal business:
HOME PURCHASE
The Lender will typically charge the home buyer for the appraisal and then hire the appraiser to inspect the property and complete the report.
There are many alternatives to this process but that’s a post for another day.
RELATED POST: I Want to choose the Appraiser
No matter which process the Lender chooses to obtain the appraisal report the Lender is always our Client so the report will first go to the Lender (or their designated management company).
If the Homeowner, Home Buyer or Realtor asks us for a copy of the appraisal report or the result of the appraisal (How much did the house appraise for?) we are not permitted to disclose that information because the Lender is our Client.
Even though the Home Buyer has paid for the appraisal they are not our Client so we are not permitted to disclose the contents or results of the appraisal report.
The Lender, by law, must provide a copy of the appraisal to the home buyer.
No worries, if you are a home buyer, you will receive the appraisal report. It just needs to come from the Lender.
So, when purchasing a home with a mortgage, the Lender gets the appraisal report first.
REFINANCE
Similar to the Home Purchase scenario above, the Lender gets the appraisal report first.
Some homeowners will get the report, read it over and have a question or concern.
I am always happy to explain the general process of appraisals but we do have limitations of what we are permitted to discuss.
Example of a common question:
- The homeowner paid $75,000 to add an inground pool. But the adjustment for the inground pool is much lower.
- In this case I can only speak in general terms because we are not permitted to discuss the results of an appraisal report.
- So my response would be something like: “Please read over the report. Every single adjustment that we apply is fully explained in great detail.”
- Side note: Not all appraiser’s will show their math in the report. But I do because I want to be sure the methods used in the report are crystal clear to the reader.
Another common concern:
- The homeowner is concerned because the report states the house only has 2 bathrooms but they actually have 3 bathrooms.
- Typically, this happens when there is a bathroom located in the basement.
- This is a simple question to answer because I can explain how and where bathrooms are counted in most appraisal reports.
So, when refinancing a house, the Lender gets the appraisal report first.
FREE DOWNLOAD: Important List for Homeowners / Improvements & Details
LISTING FOR SALE
Quite often a homeowner or realtor will be unsure of how much to list a house for sale.
This happens for many reasons. Here are just a few:
- The housing market is quickly rising or falling.
- The housing market is all over the place and it all depends on the neighborhood.
- The property is unusual and finding similar homes that have sold recently are not available.
- There are many homeowner / sellers involved and they are struggling to come to an agreement.
- A professional opinion of value by a real estate appraiser can be a useful negotiation tool.
- The homeowners will be selling the property privately (without a realtor)
When completing an appraisal for listing a home for sale, the Client is usually either the Homeowner or the Realtor. The Client will get the report first.
PS – I always ask the client these two questions which will determine if someone else will also get the appraisal report from me:
- Who shall I send the appraisal report to?
- Who else may I speak with regarding this appraisal?
PMI REMOVAL
Every lender has different rules about how to get rid of the PMI from your mortgage payment.
Long story short:
If the Lender is our Client then the process is the same as a Home Purchase. The Lender gets the report first.
If the Homeowner is our Client then the Homeowner gets the report first.
DIVORCE
It’s important to hire an appraiser that understands the difference in the purpose of the report.
And completes the assignment according to the agreed upon scope of work.
The divorce report should look different from a report that was completed for lenders.
Similar to a report completed for Listing for Sale it’s important to ask the Client these two very important questions:
- Who would you like me to send this appraisal report to?
- Who else may I speak with regarding this appraisal?
There may be many names on this list: spouse, attorneys, accountants.
Also, the Client may decide that they want to see the report first and they will take care of sharing it with whomever they choose.
SETTLING AN ESTATE / INHERITANCE TAXES
There are many misconceptions about who is entitled to see the appraisal report when settling an estate.
But, who gets the appraisal report first is an easy question to answer.
Although the information in the report is slightly different when completed for inheritance taxes (because it’s written for the IRS)… But who gets the appraisal report first is the same as for divorce purposes above.
The Client decides who gets the appraisal report first unless they request otherwise.
RELATED POST: 3 Important Dates of an Appraisal
WEALTH MANAGEMENT / TRUST ESTATES / LIFE ESTATES
Life Estates and Trust Estates are routinely valued as part of the management of these estates.
Sometimes our Client is the bank that has been given the responsibility to manage the estate.
Often, the person living in the house is the one who hires us and becomes our Client.
For wealth management, trust estates and life estates the Client gets the appraisal report first.
